Promotion Strategies

Grundy County Small Business College July 18, 2006 Megan L. Bruch Marketing Specialist

Objectives
• Define promotion and fit in marketing • Key factors to consider • Promotion strategy options

Promotion
• The act of furthering the growth or development of something • Activities to prompt or entice customers • Especially through advertising, publicity, sampling or discounting

Linking Seller and Buyer
• The seller’s four Ps
• Product • Price • Place

• The buyer’s four Cs
• Customer benefit • Customer cost • Convenience

• Promotion

• Communication

Source: http://www.foodsci.purdue.edu/outreach/vap/materials/marketing.pdf

Key Factors to Consider
• Promotion strategy should be developed to 1. Reach your target market 2. Meet your goals and objectives

Reach Your Target Market
• Clearly define and understand your target audience • Get in the customer state of mind • How does this audience make purchasing decisions? • What methods would be most effective in reaching this target audience?

Reach Your Target Market
• Consider these groups when developing promotions
• Influencer – a person’s whose view or advice influences the buying decision • Buyer – a person who makes the purchase transaction • User – a person who uses the product/service

Meet Your Goals and Objectives
• Create promotion strategies (and associated budget) based on…
• Your goal/objectives • Expected sales • Costs of marketing activities

Promotional Strategy Options
• • • • • Word-of-Mouth Publicity Sampling Discounting Advertising

Word-of-Mouth
• Passing of information by verbal means, especially recommendations
• In an informal, person-to-person manner, rather than by media or advertising • Some statistics…
• A satisfied customer will tell 4 or 5 others about a pleasant brand experience. • An unsatisfied customer will tell 7 to 13 others. • “It costs 3 to 5 times more to replace than to keep a customer.”
(Wreden, 2003)

Word-of-Mouth
• Earn it
• Provide good experience • Service oriented

• Be creative
• Ask for referrals • Implement an incentive program for referrals • Provide business cards/brochures

Publicity
• Non-paid for communication of information about company or product • Advantages
• Perceived as credible • Relatively inexpensive

• Disadvantage
• Little control

Ways to Gain Positive Publicity
• Write an article • Contact local TV and radio stations and offer to be interviewed • Publish a newsletter • Speak at local functions • Offer or sponsor a seminar • Write news releases and fax them to the media • Volunteer • Sponsor a community project or support a nonprofit organization or charity • Promote a cause
Source: http://www.foodsci.purdue.edu/ outreach/vap/materials/marketing.pdf

Sampling
• Provide free trial of product or service • Advantage
• Allows customer to try product without risk

• Disadvantage
• Can be expensive

Case Study: Nahunta Pork
• Samples in store on weekends • Experience taste and aroma from cooking • Cost of samples = ~$600 for Fridays and Saturdays • Sales of sampled products up 600%

Source: http://www.nichepork.org/valueaddedprodmktngbk.pdf

Discounting
• Coupons, 2 for 1, quantity discount, punch card • Advantages
• Attractive to price sensitive customers • Can encourage trial • Can help track effectiveness of ads

• Disadvantages
• Difficult to estimate usage • May be expensive

Case Study: Sever’s Corn Maze

Advertising
• To call public attention to • Emphasizes desirable qualities so as to arouse a desire to buy or patronize • Paid announcements

Six Point Advertising Strategy
1. 2. 3. 4. 5. 6. Primary Purpose - What is the primary purpose of our ad? Primary Benefit - What unique benefit can we offer customers? Secondary Benefit - What other key benefits will customers receive from our products or services? Target Audience - At whom (what market segments) are we aiming this ad? Audience Reaction - What response do we want from our audience? Company Personality - What image do we want to convey in our ads?

Source: http://www.foodsci.purdue.edu/outreach/vap/materials/marketing.pdf

Advertising Media
• Media Types
• • • • • • • Newspaper Radio Magazine Television Direct Mail Point of Sale Outdoor (Signage/Billboards) • Internet

• Each has advantages and disadvantages
• See handout

• Consider
• Target audience • Goals and objectives (including budget)

Summary
• Define promotion and fit in marketing • Key factors to consider • Promotion strategy options

Contacting the Center
Center for Profitable Agriculture P. O. Box 1819 Spring Hill, TN 37174 (931)486-2777 cpa@utk.edu http://cpa.utk.edu